Many of us have been following the inflation data closely for evidence of Trump’s tariffs. Along with most other economists I have been somewhat surprised that we haven’t seen more evidence to date.

One thing we can say based on the evidence, is that exporters are not eating the tariffs, as Trump promised. The data on import prices, which do not include the tariffs paid on goods, shows non-fuel import prices rose in both April and May.

The index for non-fuel import prices for May was up 1.7 percent from its year ago level. By comparison, in May of 2024 the year-over-year increase was just 0.5 percent. We will have to wait to see the extent to which the tariffs end up leading to lower profits for importers and retailers, as opposed to higher prices for consumers, but it’s clear that the exporters are not paying them.

Just as we are waiting for more evidence on where the tariffs are hitting, we are also waiting for clearer evidence of the impact of Trump’s mass deportation policy. While the pace of arrests and deportations has picked up sharply in the last month, the bigger effect is likely the fear that this process has created among immigrants, including many who are here legally or are even U.S. citizens.

With ICE officials saying that they are not subject to standard legal procedures, in terms of obtaining warrants, identifying detainees, and allowing access to lawyers and family members, millions of non-white people are scared to go out in public. This is especially true in places where the crackdowns have been most intense, like Los Angeles, but there are also reports from farmers across the countries of people not showing up for work, presumably because they fear an ICE raid.

We may see some effects of these fears on both the consumption and employment sides of the economy. On the consumption side, there are anecdotal accounts of businesses in immigrant neighborhoods, like restaurants and barber shops, being nearly empty. These businesses are not a large share of the total economy, but the fear of many immigrants to carry on their normal lives may show up in categories like restaurant sales in June, especially when we have data for states and cities that have been especially hard hit.

We may also soon see some impact on prices. Again, we only have anecdotal evidence at this point, but if migrant farmworkers are scared to go to work, we will see many crops rotting in the fields. This will start to show up in higher food prices starting in July and August, when we would ordinarily be seeing recently harvested fruit and vegetables showing up in supermarkets. This impact will be compounded by Trump’s tariffs. For example, Mexican tomatoes, which now account for 70 percent of domestic consumption, are now expected to face a 20 percent tariff starting in July.

The loss of immigrant labor may also be a factor in the decline in housing starts, which fell 9.8 percent in May, tying its lowest level since the pandemic recession. The monthly data are erratic and there are other factors, like high mortgage rates and economic uncertainty, that have also dampened starts, so the impact of the immigration crackdown is not clear.

On the employment side, we are likely to see some effect in the sectors where undocumented workers are most heavily concentrated, notably construction, hotels and restaurants, and home health care, as well as some sectors of manufacturing like apparel and food processing. Here also the effects will vary hugely by state and city. (Farmworkers are not included in the establishment employment data.)

Employment in both construction and manufacturing in California was already down from its year ago level in April. In construction, the drop was 1.5 percent, while the decline in manufacturing was 2.3 percent. But since the state and local data are only available through April, we are not picking up the impact of increased enforcement in May and June.

There aren’t any clear signs of the harsher immigration policies in the aggregate employment data as of yet. The number of employed foreign-born workers was 680,000 above its year ago level. The year-over-year increase was more than 1 million for most months in 2024, but the data are erratic. The year-over-year increase for December 2024 was just 340,000. We will likely see a falloff in the size of the year-over-year increase for foreign-born workers in the months ahead, but it’s not there yet.

One place where we are seeing some impact of reduced immigration, and possibly deportations, is in total job growth. The year-over-year increase as of May was 1,733,000, an average of 144,000 a month. This is lower than at any point since the pandemic recession. It is also lower than the pre-pandemic rate of job growth.

The slower rate of job growth should not be a surprise, since we are in the peak retirement years of the huge baby boomer cohorts. Just before the pandemic, the Congressional Budget Office projected the economy would be creating just 20,000 new jobs a month in 2025 and 2026. This means that without a big influx of immigrants we should be expecting to see a much slower pace of job growth than has been the case over the last four years.

The loss of immigrant workers will contribute to the other factors, tariffs, government job and spending cuts, and economic uncertainty that are already leading to slower economic and employment growth. The economy did in fact contract slightly in the first quarter, but there were enough erratic factors, most notably a huge surge in imports, that it would be reckless to treat this as the start of longer trend.

Anyhow, the story with immigration is similar to the story with tariffs. We have plenty of anecdotal evidence of how workers, employers, and communities are being affected, but the hard data does not yet give a clear picture of the impact.

This first appeared on Dean Baker’s Beat the Press blog.

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This post was originally published on CounterPunch.org.